Bill Gross: Without A Gigantic Reform Of Entitlements, America Will Default

PIMCO boss Bill Gross has been warning against Treasuries for awhile, and recently he abandoned them completely.

In his latest investment outlook, he warns that America will default, thanks to trillions in entitlement obligations:

...the only way out of the dilemma, absent very large entitlement cuts, is to default in one (or a combination) of four ways: 1) outright via contractual abrogation – surely unthinkable, 2) surreptitiously via accelerating and unexpectedly higher inflation – likely but not significant in its impact, 3) deceptively via a declining dollar – currently taking place right in front of our noses, and 4) stealthily via policy rates and Treasury yields far below historical levels – paying savers less on their money and hoping they won’t complain.